The invention is related to inventory management systems and methods. In particular, the invention is related to vendor-managed inventory systems and methods.
Prior inventory management systems and methods involved a large number of manually conducted tasks. These systems were labor intensive. Also, the manual steps often led to errors in the system""s results. For example, amounts of inventory of storage containers were determined by sight, dip sticks, and xe2x80x9cyo-yoxe2x80x9d level sensors. A xe2x80x9cyo-yoxe2x80x9d sensor is one in which a weight is lowered until it reached a top level of material in the silo, and the distance the sensor is lowered is measured to determine a storage container amount. The determined amount is then evaluated to ascertain if more inventory is needed and will fit in the silo. These methods provided inaccurate measurements of the storage containers amounts. Throughout the processes, time delays are common and inevitable. Also, the material in the silo is being used and the amount is not known. Using these methods an accurate, real-time inventory level was not achieved.
The determined amount, which in most instances is not the real-time exact amount due to time delays, is reported to a purchasing agent. The purchasing agent determines if an order should be placed and when it should be placed. The purchasing agent then contacts a vendor to determine if the vendor has inventory available. If some inventory is available from that vendor, the purchasing agent then places an order that will be filled in due course. The order is placed probably without regard to current market costs, transportation costs, and other peripheral costs, since the inventory is needed to maintain the manufacturing site operation. If the vendor does not have that inventory, the purchasing agent must find a vendor who has that inventory in stock, and may buy from the first vendor with available inventory, again regardless of cost.
The order is filled and then transported to the silo, for example by truck or rail. Often the location of the order during transport, its route, potential delays, and other transportation factors are unknown to the purchasing agent and vendor. Accordingly, an exact inventory arrival time is not known and delays cannot be prevented. Further, throughout this entire process, the inventory in the silo is being used and the order may not be enough to replenish the silo. Therefore, the order may not meet the needs of the manufacturing site, and operation of the site may be reduced while waiting for the order.
Another deficiency, with the above-stated inventory systems, is that the inventory management process does not account for historical, trend operational variations, or provide available information on future changes at the manufacturing site. For example, a site may increase its operation in the middle of the week, using a quarter of a silo daily on Tuesday, Wednesday and Thursday, and only an eighth of a silo on Monday and Friday. Without knowledge of this historic trend, an amount of three-quarters full on Monday morning may not cause a purchasing agent to place an inventory order, even for the middle of the week. The purchasing agent may look at Monday""s one-eighth silo use, and determine that no order is needed since one-eighth silo use over five days will still leave inventory in the silo, and keep total costs low. Thus, a silo reading on Monday is inadequate for determining inventory and use needs for the remainder of a week. Also, if an increase in product produced from the inventory is needed to meet a customer""s order, this information must be expressly communicated from manufacturing site plant management to the purchasing agent so that appropriate inventory amounts are available. The lack of an order placed by a purchasing agent may cause manufacturing site operation to be reduced, and possibly halted, which is highly undesirable and inefficient.
Attempts to automate ordering processes have been attempted, however these automated processes have drawbacks. For example, an automatic standing inventory order for a given day may be in place, without regard for the actual, real-time inventory needs. If the manufacturing site has been in a slow-down, such as for process overhauls, the silo inventory may not need replenishing. The order arrives and the silo cannot accept the additional inventory. The inventory is returned to the vendor, if they will accept a return, and the vendor loses money on the sale. In business, a vendor will accept few, if any, returns of ordered inventory. Alternatively, the ordered inventory stays at the manufacturing site in a transport vehicle, and is unused for some period of time. The orderer then incurs costs of storing the un-used inventory, rental of the transport vehicle for as long as the inventory cannot be unloaded, and un-sold material stored at the manufacturing site, which is un-economical and undesirable.
Automated computer managed inventory systems have been proposed to overcome some of the above-noted shortcomings. In one proposed system, an inventory system determines amounts and past usage in tanks to schedule, orders replenishing material, and directs a fleet of tank trucks. The system does not provide any comparative pricing and purchasing abilities to minimize inventory management costs.
Another system relies upon web-based technology to assist in providing status of liquid material in tanks. This system does not provide comparative pricing and purchasing ability for minimizing costs. Also, the system is not believed to provide for historical and anticipated future trend analysis. Accordingly, this system may not provide a low cost price for the material and does not assist in anticipating inventory needs.
Therefore, a system, which provides real-time inventory management of supply at a site, including comparative pricing and purchasing abilities, would be desirable. Further, a system that provides an ability to interact and send information to a vendor""s manufacturing schedule, forecast possible manufacturing based on historical, estimated future, or market data and indicators; and provide a display of data in a useful format to a vendor, customer, manufacturer, and others that desire the information, would be useful. An automated vendor managed inventory system of this nature would permit lowest total cost purchasing, ordering, and delivery of inventory.
Accordingly, a system and method for inventory management, in particular, vendor-managed inventory, are provided. The system and method provide information concerning inventory amounts and inventory ordering to a manufacturing site and an inventory vendor. The system comprises at least one storage receptacle that stores inventory; at least one amount indicator that determines an inventory amount in each receptacle, each amount indicator generating inventory amount signals representative of inventory amounts in the receptacle; at least one inventory price source that provides inventory price information; and a control unit that receives the inventory amount signals from the amount indicator and inventory price information from the inventory price source. The control unit analyzes the inventory amount signals to determine amounts in the receptacle. The control unit also analyzes the amounts and inventory price information, and uses this information to determine if an inventory order should be placed.
The inventory management method information concerning inventory amounts and inventory ordering to a manufacturing site, an inventory vendor, or both. The method comprises the steps of determining an inventory amount in each receptacle; generating signals representative of inventory amounts; providing inventory price information from at least one inventory price source; receiving inventory amount signals; receiving inventory price information from the inventory price source; analyzing inventory amount signals and inventory price information; determining if an inventory order should be placed based on the analyzed inventory amounts and inventory price information; and providing information concerning an inventory order in an accessible form to at least one of a manufacturing site and an inventory vendor.
These and other aspects, advantages and salient features of the invention will become apparent from the following detailed description, which, when taken in conjunction with the annexed drawings, where like parts are designated by like reference characters throughout the drawings, disclose embodiments of the invention.